POLAND: Debate On Consumption Continues As Retail Sales Rebound In October

Poland's retail sales staged a stronger-than-expected rebound in October, partially recouping losses after a bleak outturn for September. The data will inform the ongoing debate among local analysts about the proposed "death of the consumer" in 2H2024, with households showing a heightened propensity to save compared with historical trends. NBP Deputy Governor Kightley said a few days back that studies conducted by the central bank confirm these trends, albeit the underlying reasons are different between income groups.

• ING call the data "not too bad," noting that a high comparative base in fuels (due to hoarding amid lower prices in October 2023) weighed on sales in this category, but other categories rebounded. They write that consumption has slowed in 2H2024 but has not collapsed. Households have been saving and a return to spending is just a matter of time.
• Pekao write that the September slump in retail sales now seems to have been a one-off artefact and those losses were mostly recouped in October. However, they note that the level of retail sales "fails to impress" and remains stagnant over the past three years or so. They stick with their 2024 GDP growth forecast of +3.0% Y/Y.
• The Polish Economic Institute say that consumption remains weakened, but demand for services is slightly stronger than demand for goods. They note that households continue to limit consumption in favour of rebuilding their savings. This is evident especially in the case of durable goods, with a base effect in fuels also weighing on overall retail sales.
• Puls Biznesu Chief Economist Ignacy Morawski notes that if one looks at September and October outturns combined, retail sales have stagnated over that period.